The cholesterol 7α-hydroxylase gene (CYP7A1) plays an important role in regulation of bile acid biosynthesis and cholesterol homeostasis. Oxysterol receptor, LXR, stimulates, whereas the bile acid receptor, FXR, inhibits CYP7A1 transcription. The goal of this study was to investigate the role of LXRα on the regulation of rat, human and hamster CYP7A1 transcription in its native promoter and cellular context. Cotransfection with LXRα and RXRα expression plasmids strongly stimulated rat CYP7A1/luciferase reporter activity in HepG2 cells and oxysterol was not required. However, LXRα had much less effect on hamster and no significant effect on human CYP7A1 promoter activity in HepG2 cells. In Chinese hamster ovary cells, cotransfection with LXRα stimulated reporter activity by less than 2-fold and addition of 22(R)-hydroxycholesterol caused a small but significant stimulation of rat, human and hamster CYP7A1 promoter activity. At least two direct repeats of AGGTCA-like sequences with 4-base spacing (DR4) and five-base spacing (DR5), in previously identified bile acid response elements of the rat CYP7A1 were able to bind LXRα/RXRα and confer LXRα stimulation. However, LXRα did not bind to the corresponding sequences of the human gene and bound weakly to hamster and mouse DR4 sequences. Therefore, rats and mice have the unusual capacity to convert cholesterol to bile acids by LXRα-mediated stimulation of CYP7A1 transcription, whereas other species do not respond to cholesterol and develop hypercholesterolemia on a diet high in cholesterol.